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Spanish-language media giant Univision Communications, which earlier this year agreed to sell a majority stake to an investor group led by former Viacom CFO Wade Davis, reported lower third-quarter financials amid the coronavirus pandemic, but advertising trends improved.
The company, which previously said it was targeting $125 million in cost reductions, posted third-quarter earnings of $30.9 million, compared with a year-ago profit of $77.4 million. Quarterly adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, fell 5 percent to $243.8 million.
Third-quarter revenue declined 8 percent to $627.6 million, with Univision’s media networks unit recording an 11 percent advertising decline to $287.6 million, compared with a 40 percent drop in the second quarter. Media networks core advertising revenue, which adjusts for political and advocacy ads, including the 2020 election, fell 18 percent to $260.4 million, another improvement over the second quarter when the drop had amounted to 42 percent.
“The decrease was due to declines in our networks and local television businesses primarily due to lower volume commitments due to COVID-19. million,” the company said. “The decrease in media networks core advertising revenue occurred primarily in the media and entertainment, automotive, telecommunications, retail, and restaurant categories.”
Political and advocacy revenue in the quarter reached $27.2 million, compared to $4.3 million in the prior-year period.
Media networks unit non-advertising revenue, including carriage fees and content licensing, dropped slightly to $292.2 million from $293.8 million as subscriber fees grew 3 percent, “primarily due to double-digit rate increases associated with the renewal of distributor contracts partially offset by subscriber losses.” Content licensing and other revenue fell due to timing issues.
Quarterly direct operating expenses related to programming, excluding variable program license fees, fell 13 percent to $122.5 million.
Said Univision CEO Vincent Sadusky: “Univision delivered solid operating and continuing financial improvement, as our strong ratings continued into the third quarter of 2020 and delivered year-over-year primetime audience growth among adults 18-49, while the major English-language broadcast networks and our closest Spanish-language competitor reported audience declines.”
He added: “Despite the ongoing uncertainties of COVID-19, advertising significantly improved from the second quarter, including record political advertising on our platforms.”
“COVID-19 has, and will continue, to impact the company, due to, among other things, the negative impact on advertising trends and its advertising revenue, the curtailment of sporting events and other programming production that the company has broadcast rights to, reductions or delays in the production of programming by the company’s partners, and general COVID-19 related disruptions to the company’s business and operations,” Univision said in its earnings update.
It also highlighted that it has “significant sources of cash and liquidity and access to its senior secured credit facilities,” while also acknowledging that “a prolonged period of generating lower cash from operations could adversely affect the company’s financial condition.”
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